Morningstar’s HelloWallet platform has released a new
financial wellness tool designed with insight gathered from a research paper
about the association between student loan debt and retirement savings. The online calculator is meant to help people decide when
to allocate to retirement savings and when to pay off student loans.
The paper, which evaluated HelloWallet user data and the Federal
Reserve’s Survey of Consumer Finances, found that not only are higher levels of
student loan debt associated with lower levels of retirement savings, but that
there are few circumstances where paying off student loans
early results in higher net wealth at retirement.
The free calculator will gather user input such as how
individuals spend or save discretionary income, employer match rates for a
retirement savings plan, and the status of student loans. The output will be how
much more net wealth an individual might have in retirement if they choose the
more optimal strategy proposed by the calculator.
The calculator can be accessed at Morningstar.com. To
read the research paper, visit HelloWallet.com.